Josh and Chris lay out a plan for preparing to transition from a day job to full-time freelancing, including how to cut your expenses, get a raise, and use your paycheck as seed-funding for your freelancing business.
1) How can I make this day job last, to build the longest possible runway?
– I quit too soon
– 3 months too early
– almost quit 9 months too early
If you jump now without a plan
– you’ll burn your savings
– crawl back to a day job
1) Don’t quit right now
– be intentional about building a runway
Freelance on the side RIGHT NOW
– stack chips
– start courting clients
– build credibility
– start networking
– give yourself a gentle ramp, not a cliff
– Josh started 18 months out, building money & contacts
2) Build that runway until the job is getting in the way of the freelancing
– don’t fall prey to shiny object syndrome
– there’s no honor in burning your ships too soon
3) Even before you get the idea, start working on your burn rate
– get rid of debt! credit card debt, auto, mortgage, student, etc
– focus on payoff
– spend less money – make a few sacrifices
– if you lost your job tomorrow, would you be in big trouble?
– Managed to bank 70% of my take-home pay
– do not expand your spending as your income increases
– Shark Tank
* biggest reaction is when the Sharks ask about debt and it’s sky-high
– debt can block you from growing your business
– it’s easier if you’re goal-oriented
* pay off debt incrementally
* don’t try to go straight to the big payoff
* figure out how you’re wired
* Dave Ramsey approach – not mathematicaly best, but sustainable and gives you quick wins
* Optimize for what you can pay off faster and at lower interest rates
* Quick wins
Other half – pulling in money
– Big gains from increasing your salary
– Day jobs are NOT a meritocracy
– Managers are busy; keeping up with what you should be making is up to you
– Pro-actively bring your outstanding work
– asking them to adjust to reflect the additional value you’ve been providing since last time
– salary is not a gift, it’s a business deal; an exchange of value
2 tracks: how to make your paycheck bigger?
1) Get a raise
2) Get a promotion
It may be that you need to pursue a promotion instead – you may be at the top of your band in your current job
The business of freelancing is changing rapidly; anyone active in the industry can see it. My own experience leads me to see certain trends that are already in effect, and are poised to really take off in 2017. Some of the freelancing trends of 2017 will help us, and some can hurt us. Here are the most important 7 trends, and what they mean for all of us.
1) Massive numbers of millennials will start freelancing.
It’s been reported that millennials tend to want to switch jobs frequently – about every 2 years – and avoid the boredom of doing the same job in the same place the same way, in the same place, day after day. And who could blame them? Although the gig economy has been a thing for the past few years, a couple of factors are going to accelerate this trend in 2017:
Culturally, the stigma surrounding remote work is virtually (no pun intended) gone.
More companies than ever before are more open to using freelancers than ever before.
In other words, freelancing is becoming increasingly normalized. This adds up to tons of opportunity for a workforce that is increasingly choosing to eschew full-time work and instead make the leap into full-time freelancing.
Although the freelancing trends for 2017 means that the influx will be comprised of mostly millennials, it’s not 100%. While most of the more mature and established members of the workforce will stick to the “sure thing” and remain in the traditional employment they’ve become accustomed to, we’re likely to see an uptick in the number of “graybeards” deciding to test the freelancing market.
With a massive influx of fresh talent and an accompanying – if smaller – increase in experienced workers in the freelancing marketplace, the overall market is due to become very competitive before 2017 is over.
Hint: to overcome objections of youth & inexperience, have a case study or two that allows you to demonstrate results to prospective clients.
2) Niche – and even micro-niche – positioning will become increasingly important.
It seems like you can’t throw a rock in freelancing circles without someone talking about positioning. Again, this is an existing trend that we’ll see accelerating in 2017 thanks to a confluence of cultural and educational factors.
Although larger firms and small, established generalist firms (like mine!) will likely continue on just fine, the increasing number of new freelancers will make for a more competitive market. This increase in competition will force solo operators and small agencies alike to stratify into increasingly specific niches and micro-niches.
Those who don’t specialize or hyper-specialize will likely be pushed toward bottom-of-the-market work. Look for marketplaces like Upwork to be more competitive at the end of 2017 than they were at the start (this is both good AND bad for those making use of these marketplaces).
Specialist positioning is undoubtedly helpful in a number of ways, but the question that remains to be answered is, how niche is TOO niche? 2017 may be the year that freelancers find themselves pushed to find an answer to that question, as they narrow their specialties further and further, hoping to position their offerings favorably against increased competition.
3) Informal partnerships of otherwise independent freelancers will become more common.
For years, my own firm has been what I refer to as a “merry band of mercenaries” – a gelled team that works together on a regular, ongoing basis, while remaining 1099 workers and maintaining all the appropriate boundaries required by the IRS (the guidelines are clear and strict).
Additionally, my firm has formed alliances with other small firms, with each of us providing labor related to our specialty in order to complete a project owned by one firm. These alliances will prove to be increasingly important in 2017 as freelancers take on sophisticated but finitely-scoped projects that require specialty labor, but that do not allow for the hiring of a regular employee to provide that labor.
It sounds like a fragile arrangement, but “specialists collaborating with specialists” is one of the very oldest ways of working, and it’s not only one of the more interesting freelancing trends for 2017, but more critical than ever.
Hint: making use of some decent project management software – Basecamp or Asana, for example – will make these arrangements much more manageable.
4) It will become increasingly more difficult to stand out online…
To say that it’s very difficult to rise above the noise online is an understatement. At one point, merely having a blog or podcast ensured some degree of traffic and notoriety. Now, these things are considered bare minimum signs of life for your freelancing practice online.
In 2017, most online marketing efforts will languish, with a small layer of “super-winners” at the top claiming the majority of the traffic, clicks, leads and sales. Smart freelancers will have to learn how to capture sub-segments of sub-segments of this traffic that would ordinarily go to the “super-winners”, and claim these leads as their own.
Hint: stick to marketing channels that allow you to best communicate what makes you valuable. Invest in effective marketing-education tools and training, like Tiny Marketing Wins, to help you.
5) …which is why personal networking & referrals will remain king.
We live in what is supposed to be the golden age of online lead-gen and marketing automation, yet the great majority of freelancers find that their online marketing efforts yield zero return – or worse, a net-negative return. By far, the #1 way that freelancers get new client work is via their network, not via stranger-leads that come in due to any kind of automated marketing.
The fact that it’s harder and harder to stand out online will make personal network marketing and referral work more of a source of leads, not less, and many freelancers will give up on trying to attract “stranger leads” online and instead use those automation tools to go deep on personal network marketing.
To be successful amidst these freelancing trends for 2017, it’s important to learn to create more “referrable moments”, meet more valuable contacts, and do a better job of turning one-off projects into long-term relationships with recurring work. Outside of the super-winners, freelancers that don’t go deep into relationship marketing will find that their blog posts, podcast episodes, and social media updates will continue to go unread, unheard, and unseen by prospective clients.
Hint: for going deep on email marketing to your network, I recommend Drip; it’s got everything you need to do either outward-facing lead-gen campaigns or inward-facing nurturing and referral-soliciting campaigns.
6) Lifestyle will become more important than earnings…
The Golden-Era American Dream – that anyone can get a stable job that pays enough to own a home and raise a family on one income – is dead and buried. The 21st-Century American Dream can be summed up in one word: flexibility. Sure, we want to support our families, but we also know we’re not going to be able to do it in partnership with one long-term, predictable-schedule, single-location employer.
Well, if we can’t do that, what can we do? We can work flexible hours. We can work remotely. We can work while traveling. We can work with a variety of clients, on a variety of projects. We’ll still earn a great living, but that will be less the focus than it used to be; the focus will increasingly be on having flexibility – being less dictated to, having less conformity demanded of us, and having more say-so in our overall careers than traditional employment ever offered those to whom it also offered long-term stability.
Hint: look for like-minded clients who respect work-life balance themselves, and don’t expect you to run headlong into death-march projects.
7) …even though earning potential will continue to rise.
Make no mistake, whatever the American Dream may be, it still takes money to attain it, and the freelancing market will continue to offer ample money. Rates will likely fluctuate a bit as newer, less-sophisticated operators flood the market and depress rates (at least for low-end work) but the market for established operators who can offer clients clear value propositions and proven track records will remain healthy.
One of the most encouraging freelancing trends for 2017 is that in certain niches and sub-specialties, effective rates are expected to increase by the end of the year, putting many freelancers in a strong position at the start of 2018.
Hint: figure out where your offerings exist on the value continuum and try to shift them close to where money is generated.